Bitcoin’s recent recovery above $63,000 was an attempt to reclaim the short-term holder (STH) cost basis, but according to Glassnode analysts, a key onchain metric reveals that BTC is resting on “delicate ground.”
This recovery, which saw Bitcoin (BTC) rise from a low of $59,850 on Oct. 3 to a seven-day high of $64,444 on Oct. 7, saw BTC rise above its STH cost basis, which currently sits at $62,500.
“If the market fails to hold above this level, however, it will put a large cohort of recent buyers under increasing pressure, Glassnode analysts said in an Oct. 8 report.
Bitcoin short-term holder MVRV indicator. Source: Glassnode
An analysis of the true-market mean ($47,000) and the active investor price ($52,500) provides an estimate of the average cost basis for investors who are active within the current cycle.
Glassnode explained that the spot price’s position relative to these two key pricing levels could be considered an area of interest for differentiating between macro bull and bear markets.
The report reveals that BTC’s spot price has traded above both of these price levels in 2024.
“This suggests a relatively robust market, which has tended to provide demand support during market drawdowns.”
Bitcoin true-market mean and the active investor price. Source: Glassnode
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Glassnode analysts also used the UTXO realized price distribution (URPD) tool to determine the current cost basis of circulating BTC. The analysis reveals that the spot price is located within a very large cluster of coins (ranging from $52,000 to $63,000), suggesting that small changes in price can affect the profitability of a significant number of investors.
The chart below marks out the URPD with the STH cost basis residing within the denser cluster, and two large supply nodes are located between the true-market mean and active investor price.
There are also several “air gaps” close to these critical price levels where very few coins were acquired, potentially marking them as points of interest in the event of a sharp downward movement.
“This paints a picture of a market that rests on delicate ground, with a large volume of supply likely to be sensitive to the next major market move.”
Bitcoin entity-adjusted URPD. Source: Glassnode
According to the report, while these onchain metrics reveal how delicate the BTC market is with respect to the cost basis of a “large volume of the circulating supply,” this may tilt the same “back in favor of the bulls.”
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